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Apple RISC Machines

The Internet is abuzz with rumours that Apple is considering to buy ARM – the makers of the ARM processor that has all but conquered the mobile computing space. In fact, the market has already reacted to such strong rumours and has caused the price of ARM stock to go up to £2.55 a share today.

Now, what do I think of the rumour?

The businessman in me says that it is baseless. Apple would have no incentive to buy ARM at all because ARM is an intellectual property company. It does not sell any real microprocessors but chooses instead to license out its designs to other people, of which Apple is a licensee. So, Apple can already do whatever it wants with the ARM core that it gets, short of re-selling it onto other people. It can pop it inside any product that it wishes to and even make modifications and customisations like it did for the A4 processors used in the iPad.

The only business reason for buying ARM would be to deny other competitors from using ARM chips. This makes some sense if you think of it from Steve’s point of view. ARM is undeniably the market leader in mobile computing for a reason – it has technology that allows its processors to run really fast while consuming little power. That is why everyone uses ARM cores. By controlling ARM, Steve would be able to essentially dictate who gets to make mobile devices and who does not.

However, the engineer in me thinks that Steve would be crazy to do that. Although the ARM processor is technically superior to its competition, it is by no means the only way to make mobile devices. If Apple blocks others from using ARM, there are many other people who would be happy to step into that market (including yours truly). It just does not make any sense for Apple to absorb ARM – considering that it would have to spend about $8 billion to acquire that asset.

Even if Steve decides that nobody else in the world can use ARM except Apple, they would not gain anything. Their chief rival in the mobile space – Google, would not even break a sweat. While the Android platform is currently based on ARM, there is no reason why it cannot be switched to MIPS or something else easily. The kernel is Linux, which supports dozens of microprocessor architectures besides ARM. So, while it would be a small hiccup, it would not be a show stopper.

What’s most likely happening is Apple interested in taking a significant stake in ARM. Now, that would make both engineering and business sense. A stake in ARM would allow Steve to ensure that Apple retains some sort of influence in that area as well and steers ARM in the right direction. It would also allow Apple to get cheaper licenses, which would allow Apple to put ARM in everything, including Macs and servers.

That said, I do hope that this gets ARM some much needed exposure. Not many people know them, even though they are most certainly using a device powered by an ARM processor. It is ubiquitous like that.